Item Prices Explained

• QuickEasy BOS helps businesses maintain their profit margins with simple Costing and Estimating processes.
• The software uses Items, a term that includes:
  • Inventory
  • Materials
  • Tasks
  • Costings
  • Assemblies
• There are also specialised items for the printing industry.
• Pricing information is obtained from Cost Centres or Items.
• Items are used in Transactions and Estimates.

Different Item Prices Explained#

Price Types#

• Supplier:
  • Used in Materials and Outwork.
  • The price is on the supplier’s invoice and must be entered in QuickEasy BOS, either directly or through a Transaction (e.g. Supplier Invoice).
• Cost:
  • Used in Estimating and Transactions that use Cost Prices (e.g. Work Orders).
  • Can be entered manually.
  • Can be automatically calculated from a Supplier Price or a Costing.
  • Can be used in ledger transactions (that is, transactions that have Accounting price set as the default).
• Sell:
  • Used in Transactions that use Sell Price (e.g. Customer Invoices).
  • Can be entered manually.
  • Can be automatically calculated by applying a markup to a Cost Price.
• Stock:
  • The value of one unit of a stock item at a location (base unit, local currency).
  • Used in Transactions that use Stock Price (e.g. Goods Issued, Transfer Issue and Stock Adjustments).
  • Can be entered manually, or kept up to date as a weighted average (see Stock Price and Weighted Average).

Fixed and Unit Prices#

• Costings, Tasks and Outwork have Fixed and Unit Prices.
• The Fixed Price is always added regardless of the Quantity (e.g. a fixed delivery fee).
• The Unit Price is always multiplied by the quantity.
• Fixed Prices are disabled for Materials on the item’s Prices tab, but can still be used in transactions.

How Prices Are Calculated#

How the Cost Price Is Calculated From the Highest Supplier Price#

1. The Supplier Price is converted to the local currency.
2. The Adjustment (Adj%) is subtracted from the Supplier Price to determine the cost price.
3. The Unit Price is converted to the base unit.
4. All the base unit prices are compared and the highest price is selected.
5. The highest price (from step 4) is converted to match the Cost Price’s Unit.
6. The Adjustment (Adj%) entered for the Cost Price is added to the price.
   • Note: Only positive adjustments are allowed for the Cost Price. If a negative number is entered, it is changed to zero.

How the Cost Price Is Calculated From a Costing#

1. If the unit used in the costing differs from the base unit, the price is converted to the base unit.
2. All the base unit prices are compared and the highest unit price is selected.
3. The Highest Unit Price is converted to the Cost Price’s Unit.
4. The Adjustment (Adj%) entered for the Cost Price is added to the price.
   • Note: Only positive adjustments are allowed for the Cost Price. If a negative number is entered, it is changed to zero.

How the Sell Price Is Calculated From the Cost Price#

1. The Cost Price is converted to match the Sell Price Unit.
2. The price from step 1 is then converted to match the Sell Price Currency.
3. The Adjustment (Adj%) entered for the Sell Price is added to the price.

How the Accounting Price Is Calculated From the Cost Price#

1. The Accounting Price model uses the Fixed Price column, renamed Amount.
2. When an item is added, the fixed cost on the item is added to the amount.
3. If the fixed cost on the item is empty, the unit cost is added to the amount.

Pricing and Transaction Items#

1. When you create a Transaction Type, you must select the price that applies to its transactions (e.g. Cost, Sell, Stock or Accounting). Items can be added to a transaction only if they have the matching price set up on their Prices tab.
2. For transactions in foreign currencies:
   1. For Supplier and Sell Prices, items can be added to transactions only if they have the matching price in the foreign currency (as chosen in point 1) set up on their Prices tab.
   2. If the Transaction Type’s pricing is Sell Price (Any Currency), the sell prices in every currency are listed, not only those in the transaction’s currency. A price in another currency is converted to the transaction’s currency at the transaction’s exchange rate.
   3. Cost Prices are always in the local currency and are converted if the transaction is in another currency.
   4. The footer of the transaction shows the conversion rate.
3. The following items can be added to a transaction:
   • Custom Items (0: CTM): These items are created on the transaction and apply only to that transaction. Prices must be entered manually on the transaction. Rules 1 and 2 do not apply.
   • Items from the Item Master (1: ITM): These are the pre-created Items. Pricing information comes from the item’s Prices tab. Rules 1 and 2 apply.
   • Estimate – Active Qty (2: EST): The price of an item on a transaction that has estimating enabled comes from the price for the Active Quantity on the Estimate.
   • Estimate – Other Qty (3: ES Qty): QuickEasy BOS lets you show Inactive Quantities and prices on a transaction to show customers how the quantity they choose affects the price. The default templates for Quotations (Quote Letter) include these inactive quantities. They also appear on the Estimate itself.
4. The Item Totals are updated when you click Save after changing any of the following fields:
   • Qty
   • Unit Cost / Fixed Cost
   • MU%
   • Unit Sell / Fixed Sell
   • Adj%
   • VAT Type
   • Inc (VAT Inclusive):
     • If a price is VAT Exclusive, VAT is added to the price to obtain the inclusive price (e.g. Exclusive Price + VAT = Inclusive Price).
     • If a price is VAT Inclusive, VAT is deducted from the price to obtain the exclusive price (e.g. Inclusive Price – VAT = Exclusive Price).
5. On transactions and on the Prices tab of Estimates, a Fix checkbox lets you fix the Sell Price:
   • Unchecked:
     • Calculates the Sell Price by adding the markup to the Cost Price.
     • Only the markup percentage (MU%) can be edited, not the prices.
     • This option is the default for Estimates.
   • Checked:
     • Calculates the Mark Up % as the percentage difference between the Cost and Sell Prices.
     • Only the prices can be edited, not the markup percentage.
     • This option is the default for Non-estimate and Custom Items.

Stock Price and Weighted Average#

• Each stock item has a Stock Price per location: the value of one unit in stock (base unit, local currency).
• The Stock Price can be entered manually (in the item edit view or with the Inventory Batch Update), or BOS can keep it up to date as a moving weighted average of the Goods Received (the Average).
• Transaction Types with Pricing = Stock Price price their items at the Stock Price.

How Stock Price Pricing Works#

The Transaction Setting Pricing has the option Stock Price, for stock documents such as Goods Issued, Transfer Issue and Stock Adjustments.

• Add Items lists the item Cost Prices, as with Cost Price, so an item needs a cost price to be added.
• When an item is added, the entry’s Unit Price is the Stock Price of the entry’s location at the transaction date (the last Stock Price history on or before the date, otherwise the current Stock Price). It is converted to the entry’s unit and the transaction currency, with no Fixed Price.
• When there is no location or no Stock Price (blank or 0), the cost price is used.
• The price is read again when the entry’s Location or Unit changes, including the Transfer Location From / To set on save (Transfer Issue = Location From, Transfer Receive = Location To).
• A price entered manually is kept until the location or unit changes.
• When the Stock Price changes later, the entry’s price is not changed, except when the Weighted Average re-prices it after a backdated change (see Re-pricing of Stock Price Entries).
• Transfer Receive copied from a Transfer Issue: the entry keeps the copied Issue price (Location From). The Location To set by the copy or on save does not re-price it, but a location you change re-prices it from that location. An item added to a Transfer Receive manually is priced at the Location To.
• A copied entry is priced at the source cost (from a Sell Price or Supplier Price type) or the source price (from a Cost Price or Stock Price type), and at the Stock Price when its location changes, except on a Transfer Receive (see above).
• Otherwise, the type works like Cost Price, with the same columns, no VAT-inclusive prices, MU% 0 and the same Setup warnings (including the Copy Rules Cost Price copied to Sell Price / Supplier Price). Copy and Create Item use the cost price.

How the Weighted Average Is Calculated#

The Weighted Average is switched on with the General Setting Inventory > Auto Update Stock Price (Weighted Average) (unchecked by default; add it with Add/Update).

• The setting can be checked at any time, even on a database that already has stock transactions.
• When the setting is checked, the Stock Price of every stock item and location is worked out at once from its first movement, the same as when the setting is on from the start. After that, it is kept as a moving weighted average (base unit, local currency).
  • Saving the setting can take some time on a large database, because every location with stock movements is worked out again.
  • Only the Stock Prices, the Stock Price history (Item Summary Price History) and the values in the Inventory Report change. Saved transaction entries are not re-priced.
  • There is no need to run Rebuild Inventory Report afterwards. A rebuild is needed only if the Inventory Report was already wrong.
  • The Stock Price reflects the item’s full history, so it can differ from the cost price used before.
  • Opening balances entered without a price give no average until a Goods Received with a price is saved; until then, the Stock Price stays empty or keeps its old value.
• When the setting is unchecked again, nothing changes: the Stock Prices and their history stay as they are and are no longer updated.

Each movement affects the Average as follows:

• Goods Received or positive adjustment with a price: New Average = (Qty in stock x Average + Qty received x Cost) / (Qty in stock + Qty received).
  • Cost is the entry’s price excluding VAT, after discount, in local currency, not rounded to the entry’s total.
  • When the stock is zero or negative, the next Goods Received sets the Average to its cost.
• Valued at the Average, without changing it: Issues, negative adjustments (write-offs), Goods Received and positive adjustments without a price, and customer returns (Goods Returned on a Transaction Type with Enable Company = Customer).
• Supplier return with a price (an issue on a Transaction Type with Enable Company = Supplier): Reverses the Goods Received at the return price. New Average = (Qty in stock x Average − Qty returned x Cost) / (Qty in stock − Qty returned), and the Inventory Report row is valued at the return price.
  • For example, 10 units at R10 plus 10 units at R20 result in a valuation of 20 units at R15 each. If 5 units are returned at R20, the new average is R13.33 per unit.
  • When the return leaves no stock, or the Average would go below zero, the Average is kept.
  • A supplier return without a price is valued at the Average like any issue.
• Transfer Receive: Valued at the entry’s price, like a Goods Received. A Transfer Receive copied from a Transfer Issue keeps the Issue price (the Location From Stock Price with Pricing = Stock Price), so the Location To average moves towards it. For example, if the Location To has 100 units at R45 and receives 20 units at R50, the result is a valuation of 120 units at R45.83 each.
• Goods Received or positive adjustment at the current Stock Price (for example, Pricing = Stock Price) on the latest day of the location: Does not change the Average, and the Stock Price is not worked out again. Backdated ones still are, because the quantity changes the later averages.
• Stock Price entered manually (Inventory Batch Update, item edit view): Counts as a revaluation from the start of that day.

When the Weighted Average Is Recalculated#

• The Average is worked out again from the transaction date when:
  • A transaction is saved.
  • The transaction’s Status changes (for example, to Cancelled).
  • The transaction is deleted or restored.
  • An item entry is deleted.
  • The transaction date changes.
  • An entry’s location changes.
• A backdated or cancelled transaction re-values the later issues in the Inventory Report.
• A backdated transaction works the Average out again from the last Manual or Weighted Average price before its date (see the Item Summary Price History), or from the first movement (stock 0) when there is none. A Stock Price set without a history row (for example, imported) is not used as the starting price.
• Rebuild Inventory Report (with the setting checked) works the Average out again from the first movement of every item and location.
• In Items, Inventory Summary, Actions > Update Stock Price - Weighted Average - Last Month and - This Month work the Average out again for the selected rows, from the first day of last month or this month up to today (from the first movement when the row has no Manual or Weighted Average price before that day).
  • These actions work whatever the setting is. When the setting is unchecked, the Stock Price is set once and is not kept up to date afterwards.
  • You need the Batch Updates access rights.

Re-pricing of Stock Price Entries#

• With the Weighted Average, a backdated change can change the Stock Price from that date onwards. A backdated change is a transaction dated before later stock movements of the same item and location that is:
  • Saved.
  • Moved to another date.
  • Cancelled.
  • Deleted.
• BOS then re-prices the saved entries of that item and location at the new Stock Price when they:
  • Take stock out (issues, negative stock adjustments and Transfer Issues).
  • Are dated on or after the change.
  • Are on a Transaction Type with Pricing = Stock Price.
• The re-pricing updates the entry’s price, the transaction total and the Ledger.
• Prices entered manually on these entries are replaced too.
• A Transfer Receive copied from a re-priced Transfer Issue takes the new price, and the To Location Stock Price is updated.
• These are not re-priced:
  • The transaction being saved.
  • Transactions on or before the Close-off Date.
  • Cancelled or deleted transactions (not in a Stock status).
  • Supplier transactions.
  • Other Pricing types.
• Rebuild Inventory Report, checking the General Setting Inventory > Auto Update Stock Price (Weighted Average), and the Update Stock Price - Weighted Average actions do not re-price saved entries.